A leading Chinese central bank advisor said that the United States should not be encouraged to tackle its economic doldrums by endlessly printing dollars, as it would cause more problems for itself and the whole world.
Xia Bing, who is an academic advisor to the People's Bank of China and director of the State Council Development Center's financial affairs institute, said that U.S.' exceptional monetary policy of flooding the market with dollars would backfire, accelerating its own debt woes while exacerbating global inflation.
Xiao also suggested at a recent meeting with Netease readers that China needs to quicken the pace of "internationalizing" its Renminbi currency. He said that by 2020, if the Renmibi bills make 3-5 percent of the global reserve currency volume, "it will be quite a feat for China".
Now, China's currency has remained under tight control of the central bank, though Beijing hopes to move the Renminbi on a faster lane towards becoming a freely convertible reserve currency. The central bank and the Ministry of Commerce are reportedly considering ways to allow Renminbi investment in foreign lands, according to a report by the Yangtze Evening News.
Xiao said at the meeting that China should work in tandem with the United States and European countries to prevent their debt troubles from worsening, which would add to economic volatility and endanger globalization.
He admitted that Beijing had an arduous job to rein in price rises in 2011, and its four-percent inflation target set earlier this year could be elusive. In July, China's inflation surged to 6.5 percent, a record high in 37 months.
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